This week, there has been a spotlight on whether landlords qualify as "working people" – a debate sparked by Prime Minister Sir Keir Starmer's comments on Sky News and countered by Ben Beadle, Chief Executive of the NRLA, with data showing nearly 70% of landlords are employed alongside their property duties.1
The argument is that, if landlords qualify as working people, they should be protected from tax hikes in the Autumn Budget through Labour’s manifesto promise not to increase taxes on working people.
But we think we’re all focusing on the wrong question.
Beyond the rhetoric
The real challenge isn't categorising landlords as working people – primarily, they are. But there’s a different, and significantly more important, reason to be cautious around tax hikes for landlords.
16 renters registered per each new property listing in London
The average for the last three years, according to Foxtons Lettings Market Report, proving London to be a persistently competitive market.
We should be laser-focused on delivering safe, quality homes for London renters. At a time when London faces a critical housing shortage, with a year to date average of 16 renters competing for every new listing,2 the Autumn Budget should take aim at creating a thriving rental sector that works for everyone.
Home ownership isn't feasible or desirable for everyone in our capital. The Greater London Authority (GLA) predicts London could become a megacity, with a population over 10 million, within the next 20 years.3 We cannot expect a population this big to be catered to without a robust, well-organised rental sector.
As our CEO, Guy Gittins said to The Telegraph: "Rather than misplaced stereotypes, we would like to see an environment that encourages new investment into the private rented environment to ensure a fair rental sector for both landlords and tenants, working to try and address the chronic differential between supply and demand." 4
The real stakes
A landlord’s responsibilities when providing a home in London are significant and growing. However, we still need single-property and small portfolio landlords to feel confident investing in this city, which should be a consideration in any new legislation.
Property management can work with ambitious investors to deliver the standard of tenancies London needs. Every successful tenancy requires significant work – from maintenance to regulatory compliance. However, potential tax changes, like Capital Gains Tax increases, risk discouraging investment in improving housing stock.
What we actually need is an environment that encourages:
• Investment in quality rental properties
• Professional management to maintain high standards
• Fair conditions for both landlords and tenants
• Improved housing stock across the sector
Autumn Budget insight to come
While politicians debate definitions, the rental market faces real challenges and opportunities. We’re here to help ensure private landlords can confidently invest in and maintain quality homes.
Our top experts are prepared for the Autumn Budget, so we can provide guidance around CGT, Inheritance Tax, Stamp Duty, Energy Efficiency requirements – and whatever else the budget may bring for landlords.
Put us through our paces
At Foxtons, we know that being a landlord is tougher than ever, but we’re here to support you to get the most out of your investment.
Whether you have one property or a large portfolio, everyone at Foxtons works tirelessly to find the right tenant for your property, which is why we’re so confident setting you the challenge to put us through our paces.
So, whether success is finding the right tenant, navigating today’s compliance requirements, rent collection, maintenance tracking, providing insight into the Renters’ Rights Bill or getting a better deal than our competitors, we’re ready to show you how we get it done.
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Source: This article is informed by discussions with Foxtons industry experts, who have been closely monitoring developments and actively engaged in industry discussions ahead of the Autumn Budget. Stay tuned for further updates as the Budget drops.
References:
1: Landlords ARE working people, and the Government needs to know that, NRLA
2: Rental Market update: the key to success in autumn, Foxtons
3: Population projections, Greater London Authority
4: We are working people, landlords tell Starmer, The Telegraph
